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BAIC Eastern Cape plant on track, says IDC

It has been a year since Chinese vehicle manufacturer Beijing Automotive Group (BAIC) and South Africa’s Industrial Development Corporation (IDC) broke ground on a new vehicle assembly plant in the Coega Industrial Development Zone (IDZ), near Port Elizabeth.

BAIC is the major shareholder in the joint venture (JV), holding 65% of the plant, with the State-owned IDC holding the remaining 35%.

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At full capacity, the R11-billion JV plant will be able to produce 100 000 vehicles a year.

The R4.25-billion first phase will have the installed capacity to manufacture 50 000 units a year.

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The plant should reach its 50 000-unit capacity by 2022.

Around two-thirds of production is said to be destined for the export market.

BAIC and the IDC last year said that construction work on the first phase of the plant would be completed in the first quarter of 2018, with the first car to roll off the line in June of the same year.

A number of people have, however, questioned the slow progress at the building site. Local businesses have also stated that they are being side-lined from working on the project. There have also been questions around BAIC importing building materials instead of sourcing them from South Africa.

IDC automotive and transport equipment business unit head Joy Balepile says he is confident that the June 2018 start-of-production date remains feasible.

He is equally confident that the JV will reach its local content targets.

These targets include 85% local content on construction materials; 35% of construction work to small, medium-sized and microenterprises; 75% local employment at the construction site and 60% local parts content on the vehicles that are assembled at the plant.

Balepile warns that the project is “still in its early phases”.

“We are working with local entrepreneurs, noting that it is still early in the project. We are still accepting bids on the project. We are, however, ramping up our communication with local communities. The bulk of the work will not go overseas.

“We have a plan in place, with BAIC, to ensure we meet the local content targets.”

Balepile says the local content requirements were set “based on discussions wth our Chinese partner. They are minimum requirements. They should really be exceeded”.

He adds that the IDC earlier this year signed a deal with BAIC on the establishment of a supplier park to be located close to the Eastern Cape vehicle plant.

The supplier park will be built once the assembly plant is up and running.

New SUV
BAIC on Friday unveiled the newest addition to its local product line-up.

The X25 small sports-utility vehicle (SUV) adds to the D20 hatchback already available to local consumers.

BAIC already has dealers in cities such as Johannesburg, Pretoria, and Polokwane. The company plans to have dealers in 22 cities by the end of this year.